Draft Product Safety and Metrology etc. (Amendment) Regulations 2024

Debate between Nigel Mills and Kevin Hollinrake

Monday 13th May 2024 General Committees

[The Minister of State, Department for Business and Trade (Kevin Hollinrake)]

I beg to move,

That the Committee has considered the draft Product Safety and Metrology etc. (Amendment) Regulations 2024.

It is a pleasure to serve with you in the Chair, Ms Rees. To place many manufactured goods on the market in Great Britain, ranging from toys to machinery, manufacturers must ensure that products comply with the requirements of product regulations. Following EU exit, many EU product regulations were integrated into UK law and we introduced the UK conformity assessed regime, or UKCA, as our domestic product regulation approach in Great Britain. Since 1 January 2021, the UKCA has been in use alongside recognition of the EU’s CE and reversed epsilon markings.

That recognition of the EU’s CE and reversed epsilon markings is due to end on 31 December 2024. Many manufacturers with products in the scope of this draft statutory instrument would therefore have no choice but to meet UKCA requirements to legally sell their products in Great Britain. The Government know that businesses are facing increasing burdens, with cost of living pressures and global supply chain challenges. As part of our smarter regulation programme, we are minimising regulatory burdens where feasible, to reduce business costs and to help grow the economy. That is why we are introducing this instrument to continue the recognition of the EU requirements, using powers under the Retained EU Law (Revocation and Reform) Act 2023.

Last year, the Government held a series of roundtables to hear views from industry, including representatives from about 200 domestic and 50 international businesses. Industry in the UK and businesses that supply Great Britain from abroad indicated that ending CE recognition and mandating UKCA would cause issues for their businesses. It could increase costs and require duplicative processes, leading to higher prices and less choice for consumers in Great Britain. Some overseas suppliers also reported that they might reduce or stop sales to Great Britain entirely. This draft instrument will continue recognition of EU requirements, including the CE and reversed epsilon markings, providing businesses with the choice to use either EU markings or UKCA to place products on the market in Great Britain.

Furthermore, the draft instrument will introduce a fast-track UKCA measure, which will provide manufacturers with more flexibility when using the UKCA marking to place products on the market in Great Britain without compromising on the legal requirements. This instrument will apply to 21 product regulations managed by the Department for Business and Trade, the Department for Energy Security and Net Zero, the Department for Environment, Food and Rural Affairs, and the Health and Safety Executive under the Department for Work and Pensions. The Government are taking a tailored approach to ensure that regulation works for sectors and consumers covered by different regulations, including those outside the scope of the draft instrument. We have listened to feedback from the industry, and this draft instrument is designed to remove costs and burdens for businesses and to provide certainty on our approach to product regulation.

[Nigel Mills (Amber Valley) (Con)]

Will the Minister expand a bit further? Is he in discussion with any other regulatory regimes around the world that we think might have a sufficiently robust regime? We could just recognise those regimes for certain product lines and so reduce costs, not just for EU manufacturers. Are any such discussions about that being reciprocal, so that they recognise our quality standards as well?

[Kevin Hollinrake]

That is an interesting point. We are always keen to look at best practice internationally. Conversations are going on with other international regimes, including the USA, in particular in other areas not covered by this draft statutory instrument—for example, in the medical products sector. Although we are keen to strike mutual recognition agreements with different jurisdictions, I think it is fair to say that the EU is less keen to strike one. We should bear in mind some of the history and the proximity of the UK to EU markets. That is something that we are definitely keen to engage with, in particular under the auspices of our trade and co-operation agreement, which is the overriding mechanism for easing those barriers at the borders.

We estimate the draft instrument will save UK businesses £558 million over the next 10 years. It will also help ensure that goods in scope can be sold throughout the UK without needing different product markings and the associated conformity assessments required for each. We recognise that the instrument may reduce demand for the UK’s conformity assessment market. My officials continue to work with the UK Accreditation Service—UKAS—and industry to monitor the capacity of the conformity assessment body market, ensuring there is sufficient capacity to support a domestic route to market for relevant UKCA products.

Technology and manufacturing will continue to evolve. Therefore, in future the UK or the EU might need to make changes to product regulations. The Government remain able to mandate different rules in Great Britain, where we have relevant powers and it is in the interests of UK businesses and consumers. The product safety review is looking at the regulatory framework as a whole to ensure it is fit for the digital age and takes advantage of the UK’s regulatory autonomy to deliver a regime suited to the needs of UK businesses and consumers. Officials will continue to monitor ongoing EU product regulation reviews and updates.

Where EU regulations change, we will consider whether to continue recognition of EU rules on a case-by-case basis, taking into account the views of industry and consumer safety. The Government will introduce legislation later this year for additional measures to support businesses, including introducing permanent labelling flexibility and voluntary digital labelling as an alternative means of product labelling. I will share information with the House in due course. In the meantime, I trust Members will support this important instrument.

Economic Crime and Corporate Transparency Bill

Debate between Nigel Mills and Kevin Hollinrake

Report stage
Tuesday 24th January 2023 Commons Chamber

[Nigel Mills]

rose—

[Kevin Hollinrake]

rose—

[Dame Margaret Hodge]

I will give way to the hon. Member for Amber Valley (Nigel Mills) and then I will give way to the Minister.

Budget Resolutions

Debate between Nigel Mills and Kevin Hollinrake

Wednesday 27th October 2021 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra), although I have to say that I did not expect more from the Budget—I came here today fearing the worst. I expected to see some pretty dire public finances, and to be fair we have seen some pretty dire numbers. The deficits for the last financial year and the current year total £500 billion, and we will still be running a deficit this year of about £130 billion.

However, we have managed to forecast to balance the books in the financial year after next. I could not possibly have expected that we could go from the economic storm that we suffered back to a balanced situation less than a couple of years after the end of the pandemic. That is a tremendous achievement and it shows how successful the Government’s measures to save the economy have been over the past 18 months that we can even forecast that position. Even if that forecast is a bit optimistic, I was expecting years and years of deficit, and was wondering how we were going to fill it with spending cuts and tax rises. It looks, thankfully, like we will not need them.

We are forecasting the end of the deficit the year after next despite the Budget increasing the deficit by £25 billion. The measures we see are tax rises of about £12.5 billion and spending increases forecast to be about £38 billion. The spending envelope is actually being relaxed while we are balancing the books—quite a tremendous achievement. It probably shows, however, how key some of the sensitivities are in the forecast that we need to deliver the economic growth to drive tax receipts, otherwise those numbers just will not work.

We need to focus on what more we can do to increase the long-term trend in the rate of growth. What we are seeing by the end of the forecast period, well under 2%, will not be sufficient to deliver the public finances that we all want to see. That is why we need to make sure that the very welcome measures to increase investment, improve skills and boost productivity are driven through and made to work.

There was much good news in the Budget. Most of it was trailed well in advance. More money for the NHS will be hugely welcomed across Amber Valley. The rise in the living wage will be welcomed by people earning low wages. The end of the public sector pay freeze is the right thing to do. We had a year of it. I understand why we needed it in the middle of the crisis, but we cannot leave people worse off in real terms given the rise in bills.

I especially welcome the reduction in the universal credit taper. If I could just gently tick the Government off, that is not a tax rise. It is not a marginal tax rate. If we really wanted to say what the marginal tax rate was and we included that, we would have to add the 55% new taper rate, the 13% national insurance rate and the 20% income tax rate for those earning over £12,000, leaving an 88% marginal tax rate. I suspect that is not what the Government are trying to tell us, and nobody really believes that people can move into work from benefits and not have any reduction in their benefits. It is quite right that there is a reduction, so I am not sure that it was helpful to present this as a tax cut. It is a welcome reduction in the taper rate, which will ensure that work pays, but we should be careful in the presentation of that.

I have been one of those arguing to keep the £20-a-week uplift. We would have had a much better system if the benefit had started in the right place and then tapered off at the right rate. It is clearly welcome that the Chancellor has found £2 billion a year to improve the taper rate and make sure that we can be certain for everyone that work will always pay and that they will be materially better off if they take work, get more hours and get higher pay. That is hugely welcome.

I also welcome the fact that the Government, in our post-Brexit world, are starting to tweak the tax system so that we can use our post-Brexit freedoms. The reduction in the draft beer duty rate is sensible. On the domestic air passenger duty rate, it is absolutely right that people should be able to fly within their own country at a lower tax rate than when they fly overseas. That is what used to be the case until 20 years ago, when we were forced to change.

I even welcome small measures such as the plan to take away the right to offset losses incurred across Europe from UK corporation tax. That is a sensible measure. There is no reason why a loss that someone incurs overseas should reduce their UK tax bill. There are other measures that we had to introduce to be compliant with EU rules, which we could now reform. We had to take away a collection of tax avoidance measures because they did not comply with EU rules; we can now reinstate them and protect our tax. I urge the Government to continue that trend.

I welcome the changes to the research and development rules, the increased investment and the tweaks to the R&D tax incentives. It is right that when we give people a tax incentive, that work is done in the UK. Actually, it is more important that the fruits of that research are owned in the UK, that the intellectual property produced is owned and exploited here, and that the research generates jobs and tax revenues here. I urge the Government to introduce the detail behind those changes and to add a rule that says, “If you are going to claim that tax credit, the IP produced needs to be owned in the UK for you to get it.” That will be more important in the long run than where the research was carried out. If the Minister wants some clues on how to draft such a measure, he should know that I moved an amendment to that effect about 10 years ago during consideration of the Finance Bill. He can check the history.

[Kevin Hollinrake]

On the universal credit taper rate change, my hon. Friend says it is not a tax cut. It will cost the Exchequer £2 billion to do it, so it is a tax cut in that way. On national insurance and personal tax thresholds, for people who are below those figures, the extra taxation he mentioned—the 20% and the 13%—will not apply.

[Nigel Mills]

I am grateful to my hon. Friend for his intervention. I agree with his point, but actually we cannot say that every spending increase is a tax cut. That makes no sense. This is an increase in welfare spend; universal credit is not a tax. By improving the taper rate, we are not changing tax. That is not the case. It is not a factual statement, nor is it helpful for people who need to understand their own financial position to believe that description. I am sure my hon. Friend knows that many people who are entitled to universal credit earn more than £12,000 and therefore pay income tax and national insurance. That is not an unusual situation to be in.

I shall conclude so that I comply with the Chair’s strictures on time. This is a hugely powerful Budget that sets the country in the right direction. It shows a welcome improvement in the public finances and delivers on many of the priorities of my constituents. I wholeheartedly welcome it.